CEOs’ Partly Sunny Economic Outlook

The bosses of big companies say they feel increasingly confident about their companies and the broader economy, but a large majority also worry their products will lose relevance in the next three years.

Those are the conclusions of a survey of 400 CEOs by advisory services firm KPMG LLP, and it might explain why companies are slow to hire and make big investments in their businesses even as they post, in some cases, record profits.

According to the KPMG study, 59% percent of the executives polled said they feel confident about their industry, and 62% feel strong about the future for their company. CEOs are divided on growth— about half of the bosses said they’re pursuing it aggressively, while the other half described their efforts as conservative. Executives’ most common growth strategies were expansion into new markets or growing existing businesses.

What’s worrying CEOs: Competition, according to the survey. Ninety percent say they are concerned about losing market share to competitors and 72% worry that their products or services could lose relevance in the next three years.

CEOs are paid to be concerned, said KPMG Global Chairman John Veihmeyer, but he noted that the executives he’s talked to do seem more anxious than usual. He cites government regulation, a faster pace of innovation and focus on global expansion as the sources of that anxiety.

The survey includes responses from U.S.-based CEOs from public and private companies with revenues ranging from $500 million to $10 billion or more.

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